Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
This is an economy-lodging franchise operating budget motels under several brands including Scottish Inns and Red Carpet Inn. Franchisees own and operate individual properties, running front desk, housekeeping, and maintenance at value price points.
FranchiseVerdict summary · 2026
A Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchise requires a total initial investment of $134K – $531K, including a $8K – $15K franchise fee. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. SBA 7(a) loans show a 16.7% charge-off rate across 70 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $134K – $531K
- 5th pct Lodging
- Avg gross sales
- N/A
- Royalty
- N/A
- Units
- 203
- 53rd pct Lodging
- SBA charge-off
- 16.7%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $134K – $531K including a $8K franchise fee.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 53/100 (higher is better). SBA loan charge-off rate of 16.7% across 70 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem contracting at -8.6% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hospitality International, Inc.
- Parent company
- Red Carpet Inns International, Inc. and Southern Scottish Inns, Inc.
- Ultimate parent
- Southern Scottish Inns, Inc. (controlling interest holder of RCII)
- Predecessor
- Scottish Inns Franchise Corporation (name changed to Scottish Inns, Inc. in 1981, then Hospitality International, Inc. in 1982)
- Prior franchisor entity
- CEO title
- President, Chief Executive Officer, Chairman of the Board of Directors
- Christopher Guimbellot
- Incorporated in
- Tennessee
- HQ
- 1726 Montreal Circle, Suite 110, Tucker, Georgia 30084-6809
- Auditor
- Simons & Associates, CPA's
- Audited financials
- Franchisor revenue
- $1.9M
- vs $1.9M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- Christopher Guimbellot
- Headquarters
- GA
- Founded
- 1977
- FDD year
- 2024
- States available
- 29
Can you afford it, and what does the money buy?
Entry cost runs 97% below the typical lodging franchise.
Source: FDD 2024 · Items 5–7
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $8K | $8K |
| Working capital (3–6 mo) | $90K | $175K |
| Equipment, build-out, other | $37K | $349K |
| Total initial investment | $134K | $531K |
Source: Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns 2024 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $134K – $531K
- Top 40% of category vs category
- Liquid capital req'd
- $90K – $175K
- Top 40% of category vs category
- Franchise fee
- $8K – $15K
- Top 40% of category vs category
- Royalty
- $25 per room
- Ad fund
- $15 per room
- Total fee load
- 25.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty (flat) | $25 per room per month royalty component of the $40/room fixed monthly fee |
| Transfer fee | $3K |
| Total fee load | 25.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, royalty rate, ad fund rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 25.0% — above the Lodging average of 10.4%.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System contracting at -8.6% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Lodging averages
How Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 203
- Opened
- 8
- Last reporting year
- Closed
- 8
- Turnover rate
- 4.4%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -8.6%
- Net unit change over 3 years
- 3-yr CAGR
- -8.6%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 8
- Closed (3yr)
- 1
- Terminated (3yr)
- 8
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 4
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 20
- Franchisor's next-year forecast
- Ceased ops
- 3.8%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 11 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 70
- Loan volume
- $68.0M
- Median loan
- $972K
- average
- Charge-off rate
- 16.7%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 47
- Defaults
- 7
Vintage analysis
Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns charge-off rate by loan vintage
Top lenders financing Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchisees
Showing 3 of 47 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 17 states
- Startup risk premium and job creation velocity
Instant access. No subscription.
What could kill this investment?
SBA loans here charge off near the 16.0% national average.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
203-unit hotel system with 7 franchisor-initiated suits (2021-2023) for trademark infringement and past-due fees, plus a concluded 1981 SEC enforcement action against an affiliate that predates current ownership. No Item 19 disclosure and negative net growth of -8.6%. Litigation count is moderate relative to system size but the declining unit base and old regulatory history stack multiple concerns.
Litigation (Item 3)
1 case reference(s): 0 pending, 1 settled.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Simons & Associates, CPA's
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: No
- Can negotiate own supplier terms: Yes
Score breakdown · what drove the 53 / 100 verdict
- 01MINOR7 franchisor-initiated suits (2021-2023) across 203 units
- 02MINOROld 1981 SEC enforcement action against affiliate (low weight, pre-dates ownership)
- 03MINORNo Item 19 disclosure; net unit growth -8.6%
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 25.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Territory type | Specific location |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 15 days |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Georgia |
| Litigation count | 8 |
View Item 3 litigation summary
1 case reference(s): 0 pending, 1 settled.
Items 10, 11
Training & Operations
- Classroom training
- 11 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- Franchisee selects site; Franchisor approves
- Franchisor financing
- Offered
- Item 10
- POS system
- Sabre SynXis Central Reservations System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Sabre SynXis Central Reservations System
Item 20 · call current owners
Franchisee Contacts
12 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchise?
The total investment to open a Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchise ranges from $134K – $531K, with an initial franchise fee of $8K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchise owners earn?
Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
What is Item 19 in the Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns FDD and qualifies whose outlets they describe.
What is Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns's franchise failure rate?
Based on SBA 7(a) loan data, Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns has a charge-off rate of 16.7% across 70 loans, meaning 16.7% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns franchise locations are there?
As of their most recent FDD filing, Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns has 203 total units in the United States, including 203 franchised units and 0 company-owned units. 8 new units were opened in the latest reporting year.
Is Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns a good franchise to buy?
FranchiseVerdict rates Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns as a B-grade franchise with a verdict score of 53 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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If you represent Scottish Inns, Red Carpet Inn, Master Hosts Inns, Passport Inn, Downtowner Inns, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.